Murdoch Son’s Testimony on Hacking Is Challenged by 2 Former Executives

Two former News International executives, Colin Myler and Tom Crone, testified Tuesday.Credit
Reuters

LONDON — After a month’s lull, the phone hacking scandal that has rocked Rupert Murdoch’s media empire resumed with fresh intensity on Tuesday. Mr. Murdoch’s son James clashed publicly with two former senior news executives over a meeting that parliamentary investigators have identified as a critical milestone in attempts by some of his father’s trusted lieutenants to contain the scandal.

The two former executives said at a parliamentary hearing that they had informed James Murdoch, chief of News Corporation’s European and Asian operations, at a 15-minute meeting in London in 2008 that the hacking of voice mail as a reporting tool went beyond the work by a lone “rogue” reporter and a private investigator that the company had acknowledged at the time. The men said they had conveyed that message as part of a plan to win Mr. Murdoch’s backing for a record $1.4 million settlement that bound a hacking victim to silence about his case.

The former executives — Tom Crone, former legal manager for the Murdoch-owned newspapers in Britain, and Colin Myler, former editor of the now-defunct News of the World — said the settlement had been intended to avoid millions in legal costs, but several members of Parliament suggested that it was part of a cover-up intended to buy the hacking victim’s silence and prevent the scandal from spreading.

The committee on culture, media and sport, which had summoned Rupert and James Murdoch to a hearing in July, said it would meet again to decide whether to call James Murdoch back for additional questioning. Committee members have said that they will focus on determining whether he testified truthfully in July when he said that there was no indication at the 2008 meeting of a pattern of wrongdoing at The News of the World, which was closed as a result of the scandal.

James Murdoch, who has denied that he was told that the hacking involved more than a single case that resulted in two men’s going to jail in 2007, almost immediately disputed the former executives’ testimony to the committee on Tuesday. In a statement, he rejected the assertions by Mr. Crone and Mr. Myler that they had told him of an internal e-mail from the tabloid’s archive — one showing that the phone hacking had been more widespread and posed a far more serious threat financially and legally — that justified a payout that would serve to contain the damage.

The meeting in 2008 has emerged as a turning point in the saga that has embroiled Britain’s news media, politicians and the police. Months of disclosures have damaged Prime Minister David Cameron, who hired a former News of the World editor as his communications chief, only to see him resign and undergo questioning as one of 15 editors, reporters and private investigators arrested in the case. The scandal prompted the resignation of the Scotland Yard commander who was Britain’s top police officer, after disclosures about his ties to the Murdoch hierarchy; and forced Rupert Murdoch to shut down The News of the World after 168 years of publication.

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James Murdoch's account of a 2008 meeting over a lawsuit has come into question.Credit
Reuters

For Rupert Murdoch, 81, who presides over one of the world’s most powerful news organizations, the scandal has posed a more personal threat. James Murdoch, 38, has been fighting for his corporate survival, in the face of deep unease among powerful News Corporation investors. Whether James Murdoch, long considered his father’s corporate heir, can survive may depend on what the parliamentary and police inquiries reveal in the months ahead about his stewardship of the British papers as the phone hacking scandal grew.

The dimensions of the affair were captured in a closing exchange at the parliamentary hearing, when one of the lawmakers quoted from an e-mail he said had been sent anonymously to committee members by somebody who had once worked at a senior level in News International in which the writer spoke of the possibility that “a global empire could be blown apart” by the scandal. As matters stand, whether James Murdoch can withstand the mounting pressures appears to hinge, more than anything, on the differing accounts of the 2008 meeting, and what it reveals of his willingness to confront the scope of the illegal practices.

The conflicting accounts of the meeting center on two issues: whether Mr. Murdoch was shown an e-mail in which a junior reporter quoted from transcripts of three hacked voice mail messages, indicating a broader pattern of illegal intercepts; and whether Mr. Murdoch’s approval of the record $1.4 million settlement with Gordon Taylor, chief of an organization representing Britain’s professional soccer players, was motivated by a desire to save millions in legal costs for News International, the Murdoch newspaper subsidiary, or was, as several members of Parliament suggested, an effort to buy Mr. Taylor’s silence and prevent the scandal from spreading.

Mr. Crone and Mr. Myler testified that the meeting had centered on the e-mail, which they said they had cited in support of their argument that a settlement should be made with Mr. Taylor. Mr. Crone said he was “absolutely certain” he had shown the e-mail to Mr. Murdoch, and had pushed to settle the case because there were four other targets of News of the World phone-hacking who were “waiting in the wings” to begin civil damages lawsuits of their own that would draw heavily on evidence in the Taylor case if it were not ended by a financial settlement with a binding confidentiality clause.

Mr. Myler testified that all three men at the meeting “perfectly understood the seriousness and significance of what we were discussing,” in terms of more civil suits if the Taylor case was not settled and the e-mail was introduced in evidence. James Murdoch said in his statement, however, that his testimony in July was “an accurate account of events” and that Mr. Crone and Mr. Myler “did not show me the e-mail.”

“As I said in my testimony, there was nothing discussed in the meeting that led me to believe that a further investigation was necessary,” he said.

But the testimony of Mr. Myler and Mr. Crone, as well as two other News International executives who testified on Tuesday, presented a version of the payouts that dovetailed with James Murdoch’s. In July, Mr. Murdoch testified that he had approved the payment to Mr. Taylor not to buy his silence but to limit News International’s legal costs if the case went to trial. On Tuesday, Mr. Crone said that defending the Taylor suit, and others that might have followed, could have cost more than $3 million each in legal fees.

But Tom Watson, the committee’s most outspoken member, spoke of the settlement — more than 10 times the previous record for an award in an invasion-of-privacy lawsuit — as a “cover-up” and a move intended to buy Mr. Taylor’s silence. “You were desperate to see that nobody knew that phone hacking was standard practice at The News of the World,” Mr. Watson said.

A version of this article appears in print on September 7, 2011, on page A9 of the New York edition with the headline: Murdoch Son’s Testimony on Hacking Is Challenged by 2 Former Executives. Order Reprints|Today's Paper|Subscribe